Former Theranos CEO Elizabeth Holmes always dreamt of being a billionaire. In that sense and only that sense, her wildest dreams came true. At the height of her powers in 2015, Forbes estimated her net worth to be $4.5 billion. Then everything came crashing down. The rise and fall of Theranos have been breathlessly chronicled, starting with the book that first revealed the breadth of the scam, John Carreyrou’s Bad Blood: Secrets and Lies of a Silicon Valley Startup, followed by a podcast of the same name. Since then, a constellation of Theranos-inspired projects have either been released or announced. There’s Hulu's miniseries The Dropout, an HBO docuseries called The Inventor, and even a movie in the works starring Jennifer Lawrence.
Like the many projects that came before it, The Dropout charts the story of Elizabeth Holmes, beginning in her childhood in Houston, Texas, and concluding in the unraveling of Theranos on the heels of Carreyou’s investigation for the Wall Street Journal. The series, which is directed by Michael Showalter, is a largely straightforward retelling of the infamous corporate scandal, except it cuts off well before the story ends. With both Holmes and her former boyfriend and Theranos chief operating officer, Ramesh “Sunny” Balwani, receiving prison sentences, here is everything you need to know about what has happened since Theranos came crashing down.
What Sentences Did Holmes and Sunny Balwani receive?
On November 18, 2022, Holmes was sentenced to federal prison for 11 years and three months for defrauding investors of hundreds of millions of dollars. Upon her release from prison, she will also be under three years of supervision. Holmes was ordered by the court to surrender herself on April 27, 2023 to begin her sentence. She plans to file an appeal.
On December 7, 2022, Balwani was sentenced to almost 13 years in prison. However, he was convicted of defrauding patients who used the blood tests, whereas Holmes was not. His sentence is much harsher than the sentence Holmes received just weeks prior. The sentence was less than the 15 years that federal prosecutors had sought. Balwani also plans to file an appeal.
“It clearly sends a signal to Silicon Valley that puffery and fraud and misrepresentation will be prosecuted, there will be consequences and the end result is potentially decades in prison,” said Michael Weinstein, chairman at the Cole Schotz law firm of the white collar criminal defense group, in an interview with The Washington Post.
What happened after Theranos collapsed?
In 2016, Theranos was accused of inaccurate test results and was investigated by the Securities and Exchange Commission, the Department of Justice, and the Federal Bureau of Investigation. The Centers for Medicare & Medicaid Services said the company posed an “immediate jeopardy to patient health and safety.” In 2018, Holmes was charged by the SEC with massive fraud. Theranos officially shut down in 2019. Then came the lawsuits.
In June 2018, a federal grand jury indicted Balwani on multiple counts of wire fraud and conspiracy to commit wire fraud. The victims of their crimes were listed as investors and patients. Both pleaded not guilty and were released on bail. In September of 2020, at Balwani’s request, the presiding judge, U.S. District Judge Edward Davila, announced that Balwani and Homes would be tried separately.
Where is Elizabeth Holmes now?
On January 3, 2022, Elizabeth Holmes was found guilty on four out of seven counts of criminal fraud against investors. The jury was unable to reach a unanimous verdict on the other three charges. She was acquitted on four additional charges related to patient fraud. The verdict came after a nearly four-month trial, in which prosecutors used 29 witnesses to help advance their argument that Holmes intentionally deceived investors and patients by lying about Theranos’s blood-testing capabilities and business outlooks.
Elizabeth Holmes arrives to the first day of jury selection for her trial, which began in 2021.
In the meantime, Holmes is out on a $500,000 bond secured by property. She is reportedly living with her partner, Billy Evans, and their son in a 74-acre, $135 million mansion in the storied Green Gables estate in Woodside, California. Evans is the son of the southern California hotel magnate Bill Evans and a graduate of M.I.T. where he studied math and technology. The couple met sometime in 2017 but were first spotted together at Burning Man in 2018, a mere few days before Theranos employees received an email alerting them of the company’s dissolution. Evans gave Holmes his M.I.T. signet ring as a proposal of engagement, and the couple married in a secret ceremony a little less than a year after their Burning Man rendezvous.
Where is Sunny now?
Unlike his ex, Balwani has kept a relatively low profile since he exited Theranos. His name briefly appeared in the headlines in late 2019 after it was revealed that Holmes planned to accuse him of abuse and pin the blame for Theranos’s failure squarely on his shoulders. Balwani declined to speak to the media about the accusations and instead responded through a series of court briefings. "Mr. Balwani unequivocally denies that he engaged in any abuse at any time," his lawyers wrote in a December 2019 filing obtained by Reuters. While his presence loomed large over Holmes’s trial, Balwani himself remained silent, never speaking to the press or responding for comment.
Sunny Balwani, also at Federal Court.
What about the whistleblowers?
Sunny and Elizabeth weren’t the only two people to have their lives turned upside down by Theranos. When a trio of employees decided to blow the whistle on the company’s lies, they effectively volunteered to be a part of Theranos's story until every trial was over. For Adam Rosendorff, Erika Cheung, and Tyler Schultz, all of whom quit their jobs in 2014, the end is finally in sight. Only one trial remains, and it’s the less high profile of the two. Still, there’s a good chance they will be on the prosecution’s witness list just as they were in Holmes’s trial.
Rosendorff, Theranos’s former lab director, and Cheung, a lab assistant, both ended up testifying extensively about their experiences during Holmes’s trial. Rosendorff in particular was key to the prosecution’s case. Over four days, he described the many emails he sent to Holmes discussing the concerns he had about the laboratory. This scene is actually depicted in The Dropout, when Rosendorff—who is named Mark Roessler in the series—is shown forwarding several emails to his personal email account right before he quits. He knew then he might need the evidence. These days Dr. Rosendorff works as the medical director for PerkinElmer, Inc., a medtech company focused on diagnostics, detection, and life sciences research.
Elizabeth Holmes before the fall, at a 2015 global summit.
Erika Cheung’s testimony provided the scientific evidence for Rosendorff’s testimony about Theranos’ technology failures. According to CNBC, Cheung spent six hours answering questions about Theranos’s signature testing device, the Edison. She described in detail the high failure rate of its blood tests, telling the jury “You’d have about the same luck flipping a coin as to whether your results were right or wrong. It was concerning to see this degree of failure, this was not typical for a normal lab.”Since leaving Theranos, Cheung has struck out on her own and appears to keep busy with a variety of projects. On her LinkedIn profile, she describes herself as a “technology and innovation ecosystem builder” and says one of her main priorities is leading Ethics in Entrepreneurship, a non-profit that she co-founded with her friend and fellow Theranos whistleblower Tyler Schultz.
Speaking of Schultz, he isn’t sure why he wasn’t ever called to testify. "I guess my emails just spoke for themselves," he said during an interview with NPR earlier this year. Shultz said he kept up with the trial mostly through the news, but did show up at the courthouse for closing arguments and watched the trial from the overflow room.
"I just wanted to listen to the closing arguments and make it feel real, rather than watching your life through a Twitter feed," he told NPR. When the verdict came back guilty, he celebrated by popping a bottle of champagne with his family. Schultz now runs his own biotech start-up that is focused on fertility testing and diagnostics. He experiences the pressure to dazzle investors every day. "I could see how this environment could create an Elizabeth Holmes," Shultz said.
As for his relationship with his grandfather, ardent Theranos supporter and former Secretary of State George Schultz, Tyler said it never fully recovered. His grandfather didn’t apologize, but before he died in February of 2021, the elder Shultz told his grandson he believed he did the right thing.
